Amanah Saham 1Malaysia (AS1M) for Indian Community

According to the Malaysian Indian Blueprint, one of the initiatives planned for the Indian community is a special allocation to invest in Amanah Saham 1Malaysia (AS1M). This was also mentioned in Budget 2018 speech by Prime Minister. A total of RM1.5billion is allocated via AS1M fund to the community, with a maximum limit of 30,000 units per person. That means about 50,000 people if everyone fully utilise their allocation.

The agency in charge is SEDIC, an unit under the Prime Minister’s Department. You can find SEDIC’s FB post on AS1M here.

To help those in low income category, specifically the B40 group (having household income below Rm4680 as of 2017), the government is given a soft loan of RM5,000 per person. RM500 million is allocated for 100,000 families via interest-free loan for five years (monthly repayment of RM83++ for 5 years). It is expected that the return from the investment will be sufficient to pay for the loan. However based on the dividend rates for past few years, assuming return of 6.5%, the dividend will be RM325 while repayment for 12 months will be RM1,000.

The procedure to apply for the RM5,000 soft loan will be announced in February and remember it is for the low income category define as in B40 group. However, regardless of being in B40 group or not, you can start buying the AS1M units starting from Monday 29th January 2018.

For those already having invested in AS1M before, you can top-up until reach 30,000 unit at the branches or via online at myasnb.com.my .

If you are wondering about the unit prices, AS1M trades at RM1 per unit as shown below (price from ASNB website:

Let’s do a rough calculation for 5 years with 6.5% return per annum:

Year

Investment Value (RM)

Dividend (RM)

2018

5000.00

325.00

2019

5325.00

346.13

2020

5671.13

368.62

2021

6039.75

392.58

2022

6432.33

418.10

6850.43

With RM5,000 investment, you can get RM6,850.43, a return of 37% or average of 7.4% per year.

Its obviously better than FD rates, but face competition from unit trusts which tend to offer better returns (Disclaimer: I’m not promoting any unit trust products). For those looking to diversify their investments, can consider investing some amount in AS1M or even other unit trusts under ASNB provided you are qualified.